ReProFinance Reliable and Professional Financial Management

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ReProFinance Reliable and Professional Financial Management Company Overview Click on and be a part of Our company, "Revendor Management Inc.", was formed in the end of 2009, by merging of several companies aiming to create more advantageous and productive business by joining efforts, experience and the existing resources. Soon a trademark ReProFinance was registered. For today our company is the most successful and perspective corporation in its field of activity. Since our company has united several stable and successful companies it consists of three basic departments: Securities and Stocks Department Department dealing with foreign exchange market (Forex department) Consulting, marketing and financial investments risks estimation department Our team Our staff consists of highly skilled professionals interested in their work and prosperity of the company. During many years our employees have got not only a great experience but also have developed unique strategies, technologies and know-hows that allow ReProFinance to be favorably different from the competitors. Investment fields The most attractive for our investments are the companies working in such fields as: Research, development and implementation of the newest technology in the field of medicine, public health services, nanotech, biology, microelectronics, materials technology, chemistry, ecology. The mining operations, valuable metals and power resources. Software developments and Communications. Investment criteria In evaluating and selecting companies for investing, we look for the following investment criteria: Market Position. How large is the market? Is the company a leader in its industry or market niche? Does it have the potential to become one? Management. What are the management's strengths and weaknesses? Are their incentives aligned with those of investors? Growth Potential. Does the company have a clear competitive edge sufficient to scale up rapidly in its target market? Cash Flow and Profitability. Is the company at or near positive cash flow, and does it have an attractive level of profitability? Control. Will the investment secure control of the company or a significant minority interest, with adequate protective covenants for investors? Identifiable Exit Prospects. Are there multiple exit opportunities for the proposed investment, either through sale to domestic or international buyers, strategic buyers, or on public securities markets? Internal Rate of Return. Is the potential return commensurate with the risk in the context of the Fund's overall portfolio of investments? Our partners We are always open for mutual advantage cooperation and are very interested as in our present partners and clients, and in new investors. Primary direction of our business is attraction of private investors for which our company gives the most favorable conditions of cooperation. Moreover today we cooperate with more than thirty large companies and banks worldwide that allow us to occupy one of the leading positions on the market of investment management.

It's important to note that the client can choose the investment profile independently by contacting our staff or select the ready made optimum portfolios listed in section Plans on our website.

Strategy of investment portfolio formation

Investment portfolios developed by us will allow clients of the company to place their investments in the share market by reducing time and risks if compared with independent investments. Strategic asset allocation in portfolios is carried out on the basis of researches and corresponds to optimum indicators of risk parity and profitableness for various types of investors in accordance with the investment strategy - conservative, balanced, aggressive and long-term growth.

It is supposed that the client of the company can choose for himself the optimum strategy and adhere to it in his/her work on the share market. In our strategic reviews we quarterly update portfolio asset structures, both on classes of assets, and on separate tools in segment of shares. On the average approximately 50% of share segment is formed from 2-tier shares. Poor attention of analysts to a number of the 2-tier stock companies and limited information on these companies create attractive investment possibilities.

Analytical department of ReProFinance keep a close watch on all 2-tier securities including the following sectors: mechanical engineering, metallurgy, building, transport, consumer sector, chemistry and petroleum chemistry, raw materials extraction etc. According to our recommendations, investment portfolios are regularly reconsidered to add new securities from perspective sectors which can become profitable in the nearest future and to get rid of the securities, which are not perspective any more. This will allow receiving higher investment profitableness, along with minimization of risks.

It's important to note that the client can choose the investment profile independently by contacting our staff or select the ready made optimum portfolios listed in section Plans on our website.

The general scheme of portfolio formation

In general, the process of investment portfolio formation looks as follows:

• Macroeconomic forecast.
• The forecast of market movement and branches (the fundamental analysis)
• The forecast of separate instruments movement (the fundamental and technical analysis)
• Establishing the structure of investment portfolios

The first stage implies the macroeconomic forecast. The given stage serves as preparation for working out the general investment strategy, including a well-planned asset allocation in a portfolio in accordance with classes of instruments and branches.

At the second stagethe behavior of the market and selected industries are predicted, the most perspective directions of investments are defined, dynamics of Dow Jones index movement and branch indexes are predicted.

Further, at the third stage branch analysts define exact instruments to be included in an investment portfolio. This stage is a major part of the investment process, as we receive a pool of recommendations for purchasing 15-20 the most perspective companies from different branches.

At the fourth stage the optimum structure of investment portfolios is established

Technique of weighting securities in investment portfolios

Assets which can be included in a portfolio, are divided into three classes:

• Ensuring an interest (bonds);
• Ensuring an augmentation of capital at moderate investment risk (blue chips);
• Ensuring an augmentation of capital at rather high investment risks (2nd and 3rd-tier companies).

Shares of asset classes in a portfolio are defined on the basis of the analysis of risk-profitableness under historical data of the share markets. As for the bonds, in case of absence of volatility and the stable income, 8% annually is supposed. The analysis of the data (expected return) and the standard deviation (sigma) give information on the average yield of the share markets. It is supposed that at investment horizon of 2 months, it is possible to expect that 88,9 % (on an inequality of Chebysheva length of an interval for six sigma) significances of annual yields will get a range (ex.ret-3*sigma; ex.ret+3*sigma). Further, proceeding from restrictions of three types of strategy on risks (a base variant - the maximum depreciation on a conservative portfolio of 5 %, on the balanced portfolio - 15 %, on an aggressive portfolio - 30 %), we define structure of portfolios which corresponds to required risk characteristics of a portfolio.


The structure of high liquidity segment of shares in a portfolio is defined on the basis of the recommendations provided by branch analysts. Securities in high liquidity segment are combined in an equal proportion in case official recommendations are present not on all securities, but analysts evaluate securities as perspective at the moment of portfolio formation. If securities included in a portfolio have a growth potential (upside) under official recommendations the securities share in high liquidity segment is defined proportionally to a company upside share in total upside of all securities included in high liquidity segment. The structure of low liquidity segment of shares in a portfolio is defined on the basis of the recommendations provided by branch analysts, the aggregated forecasts of the economy and expert appraisals. As a result of realization by branch analysts of the analysis of emitters and their perspective the following characteristics of securities are defined: the fair price of the share and risks of emitters.


Classification of risks is described in the following table:

Market risks	Risks associated with the circulation of securities on the exchange and impossibility to sell the share for market prices.
Credit risks	Risk of a default at the debt extinction, an essential part of debt load, inability to serve promissory notes, confiscations, etc.
Operational risks	Risk of incompetent actions of staff and management resulting the assets losses
Branch risks	The risk associated with a competitiveness, cyclical fluctuations and other features of real production
Legal risks	Risk of losses because of infringement of legal requests of the current legislation, including tax, belonging to the group (holding) with which key enterprise got problems (including legal).
Degree of an information openness	This kind of risks is extremely important criteria for investors when it comes to estimating which shares should be included in a portfolio. Absence or inaccessibility of the information essentially increases the risk at realization of investments.

On the basis of the above-stated characteristics the total risk estimation of the company is defined on the ten point scale. Thus the weight of each risk in a total estimation is defined by RePro Finance strategist in an expert way. The received estimation of risks of the company is used at discounting of a growth potential of the company (definition of corrected upside), thus each point of a risk estimation reduces a growth potential by 1/10 part. Thus, if company risks = 0 corrected upside remains invariable. If risks are maximum (=10) upside is corrected to 0. Further, the securities share in low liquidity segment is advanced proportionally to a share of corrected upside of the company in total corrected upside of all securities included in low liquidity segment.